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Workers struggle in China

Friday 14 August 2009, by Robert Paris

Jilin province: 30000 workers at Tonghua Steel on strike to protest against privatisation

Thu, 30 Jul 2009.

Striking workers violently clash with the police, the chief executive is dead, dozens of police vehicles destroyed and dozens of workers arrested

Lizhi Chen, chinaworker.info

On Friday 24 July, several tens of thousands of workers and retired employees as well as their relatives at the state-owned enterprise of Tonghua Steel Group Corporation in the city of Tonghua (Tonghua Steel) staged a massive strike and demonstration to protest against the decision made by the provincial government of Jilin to sell Tonghua Steel to the privately-owned Jianlong Steel Group (Jianlong Steel) for "the second time". Striking and protesting workers clashed with the management of the company and armed policemen who came to suppress this demonstration within the factory zones of the enterprise. The chief executive of Jianlong Steel, Mr. Chen Guojun, threatened the workers that if they do not return to work, then everyone will be fired. The angry workers physically hit Mr. Chen, and around 9pm during the evening of 24 July, it was reported that Mr. Chen died as a result of severe wounds. During the clash, workers destroyed dozens of police vehicles, and dozens of them were arrested as a result. But the workers continued to occupy the factory zones until well into midnight, until the provincial government of Jilin explicitly declared through various media (including TV and radio) that "Jianlong would never participate in the restructuring of Tonghua Steel".

As a Chinese proverb states, "ice that has frozen three feet deep cannot be due to a single day’s coldness". During the process of privatisation of Tonghua Steel, there have always been a high level of antagonism between the workers at Tonghua Steel and the privately-owned Jianlong Steel that attempts to control Tonghua.

Jianlong Steel belongs to the Chinese steel industry billionnaire Mr. Zhang Zhixiang, and most of the enterprises it controls are situated in the Zhengjiang, Hebei, Heilongjiang and Jilin provinces, as well as in the Beijing area. In 2007, the total amount of stock controlled by the Jianlong Group and the total revenue exceeded 50 billion RMB for the first time, and steel production level exceed 12 million metric tons. In the list of 500 top Chinese enterprises released not so long ago, Jianlong was placed in 158th place, 10 places higher than around the same time last year. At the moment, as well as the staple industry of steel production, Jianlong also incorporates some ship construction and electrical goods manufacturing industries under its banner. In 2008 Zhang Zhixiang was ranked 10th on the list of China’s richest people, and it is estimated that his personal wealth exceeds 20 billion RMB. It is said that Zhang Zhixiang is a grandson of the vice-chairman of the Chinese Central Military Commission Zhang Wannian.

Jianlong Group usually purchase large or medium-sized state-owned enterprises at low prices and then expand and develop them, acquiring great amounts of wealth through the privatisation of state-owned assets. From 2005, Jianlong Group purchased 50% of the stock belonging to the largest state-owned enterprise in Jilin province - Jilin Metallurgy Group, amounting to a capital volume of more than 10 billion RMB. As of yet, this is still the largest example of "state-owned enterprise restructuring" in the entire north-eastern region of China.

Enterprises under the banner of Jilin Metallurgy Group include: the largest carbon-based chemical manufacturing enterprise in China (Jilin Carbon Compounds Group); the largest iron metallurgy enterprise in China (Jilin Iron Metallurgy Group); the second largest nickel production enterprise in China(Jilin Nickel Metallurgy Group); and the largest gold production enterprise in Jilin province (Jilin Gold Minerals Company). In addition, incorporated into Jilin Gold are a few companies that are already on the stock market. It is indeed around this time that Jianlong Group began to purchase Tonghua Steel for the first time. Tonghua Steel is the only large state-owned enterprise remaining in Jilin province, and most of its stock are owned by the state-capital assets committee of Jilin province. At the same time as a result of the restructuring program that occurred during the late 1990s, the workers at Tonghua owned a small amount of stock, involving tens of thousands of both employed and retired workers.

Under the explicit support of the Jilin provincial government, Jianlong Group purchased around 40% of Tonghua’s stock in 2005 and began to engage in the full-scale management of this enterprise. After this the condition of the enterprise declined dramatically and the level of antagonism between the management layers and the workers intensified daily. Some experienced workers with more than 20 or 30 years of work experience saw their monthly salary decreasing to around 300 RMB, whereas the new management layers sent by Jianlong Group all had very high wages, the chief executive of the company mentioned earlier in this article - Mr. Chen Guojun, had an annual income exceeding 3 million RMB.

In 2008 as a result of the intensification of the antagonism between labour and capital, there occurred an incident during which workers killed a factory head. During the period from 2008 to 2009, both employed and retired workers at Tonghua Steel engaged in numerous demonstrations, leading to a march of 3000 people to report cases of corruption on 3 March 2009. This, however, was merely ignored as well as suppressed by the government and the capitalists. At the end of 2008 due to the effects of the economic crisis huge losses were experienced in the steel industry. From the autumn and winter of 2008 to the spring of 2009, Tonghua Steel ceased production, causing nearly 150,000 people living in the Erdaojiang district in the city of Jilin having insufficient home heating during the most intensely cold period at the heart of winter. This was caused by the cessation of production at the main factory zones and workers’ residential areas of Tonghua Steel, which are located in Erdaojiang district, leading to a general paralyzation of the entire regional heating grid.

As Jianlong Group saw that capital-labour antagonisms have intensified and there is no profits to be gained, in March 2009 they declared that they would resign from the actual functional management of Tonghua Steel, but still kept control over stocks of high-level enterprises such as Jilin Steel and related mining industries under Tonghua. The intention is quite clear: controlling the upper levels of the production chain would in the future enable Jianlong to re-initiate their control over the entire production chain. It is said that after Jianlong declared that they would quit from Tonghua, fireworks went off in the Erdaojiang district for more than 2 hours by people holding celebrations for this event.

In order to sustain employment and house heating for its workers, Tonghua Steel continued to run even though it was losing money, many employees were struggling to make ends meet. (From the period of 2008 to April 2009, Tonghua Steel lost more than a billion RMB) Yet since March and April this year, the global steel market began to heat up again, and the prices of steel began to rise. By June 2009 Tonghua Steel began to make profits again, and the monthly profit margin exceeded 60 million RMB. At around this time, during mid-July, Tonghua Steel received an order from the state-capital assets committee of Jilin province, and was told that Jianlong Group would once again participate in Tonghua Steel, and this time the amount of stock it would control would exceed 65%. For the workers at Tonghua who have diligently struggled at their workplaces for nearly a year to reverse the losses of the enterprise, to see that just when there appeared a little bit of profit the avaricious capitalists and bureaucrats have returned to plunder them, is to really raise the level of their indignation.

On 23 July, the state-capital assets committee of Jilin province and the city government of Tonghua formally ordered Tonghua Steel to hand over the control of its stock to Jianlong Group. Angry employees and retired workers went onto the streets to protest. On the morning of 24 July, more than 3000 Tonghua employees and retired workers went around the entire city once and explicitly called for the "defense of the state-owned enterprise Tonghua Steel". The demonstrators went to numerous factory zones to mobilise other workers and virtually everyone responded to their called. Workers went on strike one after another and joined the demonstrators from Tonghua, by the afternoon of that day the number of demonstrators had already exceeded 10,000 people. At around this time, the local government sent both police and riot police, as well as around 1000 armed militias to suppress the peaceful demonstrators, and some of the armed police were called from the nearby cities of Changchun and Jilin. The management layer of Jianlong Group continued to threaten the workers and caused many incidents. They stated that if the workers do not immediately return to work, then they would all be fired. This eventually made the situation out of control. Workers violently clashed with the armed police, and fought with the managers, leading to the death of the chief executive Chen Guojun, and the arrest of dozens of workers. By 10pm that evening, more than 30,000 workers and their relatives still occupied the factory zones and refused to retreat. In order to pacify the situation, the local government sent another extra 2000 or so policemen, and through various media, including both TV and radio, they formally declared that Jianlong Group has decided to quit from Tonghua Steel, and would never again participate in its "restructuring" process. The incident is still developing as this report is being written.

Under the effects of the current global economic crisis, the Chinese government is continuing to engage in policies based on neoliberal privatisation, and letting the capitalists to have a free reign in avariciously plundering the masses. The basic political rights and economic interests of the workers are being trampled on without any consideration, and this kind of situation has finally caused the current incident. Workers through numerous incidents such as these are already very clear about the real political situation, and know that underneath the hypocritical coating of the "communist party" only goods labeled with "market is supereme" and "capital is omnipotent" are sold. Without the conscious self-organisation and struggle of the working class, and without building independent trade unions and realise the freedom to strike, there would never be the true realisation of the basic interests of the working class as a whole.

Chinaworker calls for:

* The workers at Tonghua Steel should immediately organise worker’s committees at every level, and take-over the day-to-day running of the enterprise through democratically elected representatives, and put an end to the attempts of privatisation via the power of mass pressure.
* The workers at Tonghua Steel should immediately build their own independent unions, and in the name of the entire workforce engage in collective bargaining with the local government to demand that the management of the entire enterprise be passed into the hands of the workers collectively in a democratic manner.
* Immediately release all workers and worker’s representatives that were arrested by the police during the clash, oppose the violent suppression of the workers’ demonstration by the local government and the police and the violation of workers’ basic rights.
* Immediately build independent investigative committees for this incident, and have democratically elected worker’s representatives participate in the entire investigative process. There must also be a thorough investigation into the violent actions of the police as well as the actions of the capitalist management that caused the antagonism to intensify.
* All socialists and left forces should actively support and defend the important struggles against privatisation, against capitalism and against bureaucratic dictatorship conducted by the Tonghua Steel workers. Just like the support that was given to the workers at Yimian Textiles in Baoding, Hebei province, leftists should see this as an important step in carrying forward the socialist labour movement and conscientiously support it.

Ultimately, we at Chinaworker believe that only through the complete overthrow of the capitalist system and bureaucratic dictatorship, and the realisation of genuine democratic socialism in which the working class and the labouring masses engage in the democratic management and planning of the economy in a bottom-up fashion through public ownership of all assets, can there be a fundamental solution to the current global economic crisis.

Jilin: Manager beaten to death in steel privatisation battle

Tue, 28 Jul 2009.

30,000 workers fighting for jobs and pensions in northeast China

chinaworker.info reporters

A fight against privatisation and asset-stripping by 30,000 steel workers and retired steel workers in northeastern Jilin province resulted in a boss getting beaten to death on Friday 24 July. The incident has attracted global publicity, as a sign of the explosive social tensions in China as the global capitalist crisis continues. It also undermines government attempts to portray violence in Xinjiang province as exceptional, and the work of outside forces.

Around 10,000 workers and 20,000 retired workers have been protesting the sale of state-owned Tonghua Iron & Steel to the private Beijing-based Jianlong Steel Holding Company, which threatened drastic job cuts and loss of pension entitlements. Chen Guojun of Jianlong, the newly named ‘interim general manager’ of Tonghua was beaten to death by workers who had shut down the steel mill to prevent its take-over by Jianlong. Chen enraged a crowd of workers when he announced that staff numbers at Tonghua would be cut from 30,000 to 5,000. During the protest action on Friday 24 July, more than 3,000 workers kept riot police at bay for almost the whole day. The workers occupied the steel mill and also blocked a railway track, preventing supplies reaching the plant, and forcing the company to suspend production for 11 hours. About 100 people were injured in clashes with riot police, the Hong Kong-based Information Centre for Human Rights and Democracy said.

“Chen disillusioned workers and provoked them by saying most of them would be laid off in three days,” said a Tonghua police officer named Wang, quoted in the state-run China Daily. “Chen, saying that a total number of 30,000 employees would be cut to 5,000, infuriated the crowd.”

The english language Beijing News carried a report that the fighting started when workers demanded a meeting with Chen. The workers refused his order to return to work, battered him with boots and pushed him from a second-storey office, the newspaper said. A Reuters report, however, claimed Chen Guojun was thrown down some stairs to his death. Workers continued to block access to the factory, including for medical staff, because they feared their struggle would be lost if police and officials took control of the premises before their demands were met. Police were pelted with water bottles, although some reports claim bricks were thrown. The workers called off their action late in the evening, once it was announced that the Jianlong takeover had been shelved permanently.

Media comment

“Makes those French militants and their crazy boss-napping antics look positively small-time by comparison,” commented the business website managementtoday.com. “Surely there’s a lesson for recession-hit bosses everywhere in that?” it added. On domestic websites their was a flurry of comment. “Almost all were sympathetic to the plight of workers losing their jobs as part of China’s privatisation programme,” noted Sky News.

According to comments posted online, Chen infuriated workers with his “high-handed” attitude. Steel workers at Tonghua and throughout state-owned industry have suffered pay cuts as a result of the crisis. Meanwhile, Chen Guojun received an annual salary of 3 million RMB ($500,000) last year, according to media reports. This compares with Tonghua Steel’s retired workers who each receive only 200 RMB ($29) a month for living expenses.

“Workers may feel the state has sold them down the river, especially if there are layoffs or if the private investor moves in their own people,” commented Wang Erping of the Chinese Academy of Sciences Institute of Psychology. “Such protests pose a headache for the government – and any potential investors in privatised steel factories – since China lacks independent unions and limits legal options for workers to get their complaints heard.”

Steel sector ‘consolidation’

The Tonghua case is typical of China’s privatisation programme and how this is being stepped up in strategic industries like steel that face massive overcapacity. As Reuters correspondent Lucy Hornby points out, “That has meant opting for modern plants and laying off workers at state-owned firms while promoting well-paid executives trained in capitalist finance, a process that can get ugly, especially in economically depressed areas like northeast China.”

The central government wants to speed up ‘consolidation’ of the industry in the teeth of the current global crisis. Steel output in China is once again expanding rapidly, fuelled by a huge stimulus programme and flood of cheap credit. But at the same time, global demand for steel is falling sharply. China now has 160 million tonnes of excess capacity, according to industry officials, equivalent to the total steel output of the U.S. and Russia combined. Unless some steel plants are closed, the central government reasons, prices will continue to fall, along with profits, and any hope that steel plants will be able to repay the loans they use to finance their expansion. For this reason the State Council (central government) has called for consolidation of the industry, with five major producers occupying 45% of production by 2011. It is likely that pressure upon the Jilin provincial government to agree the merger with Jianlong came mainly from the central government, which regards private companies as a positive force for achieving savings and increased productivity.

Jianlong is a privately-owned conglomerate set up in 1999, which ranks 158 out of China’s 500-largest companies, with 40.79 billion yuan ($6 billion) in 2008 sales, according to its website. Tonghua ranks 244 out of the top 500 enterprises. The company posted a profit of 42.8 million yuan in June, reversing a loss from last year’s same period. This reversal in Tonghua’s recent fortunes explains the renewed interest from Jianlong, which acquired a minority stake in the company in 2005, but then pulled out as Tonghua lost money amid the global downturn. It was announced last week that Jianlong would buy in again, only this time taking a 65 percent stake. Workers and local people see the Jianlong bid as a blatant case of asset-stripping. The company, and the unfortunate Mr. Chen, made no secret of its plans to razor the workforce.

Quite probably the old management of Tonghua, wanting to block Jianlong’s takeover for their own reasons, had a hand in Friday’s events. It seems this is now the main track of the police investigation, although 20 Tonghua workers have been arrested so far. Information about Chen Guojun’s stratospheric seven-figure salary was widely leaked before his arrival at the Tonghua plant last week. It is possible that workers were egged on by former bosses in the attack on Chen.

Stop privatisation, defend jobs

Workers will welcome the news that the Jilin provincial government has decided to stop the merger plan with Jianlong. The Xinhua news agency said the government halted the plan “to prevent the situation [i.e. worker unrest] from expanding.” But this is not enough and does not yet represent a clear victory for the workers’ struggle. The Tonghua factory has been shut down now on the grounds of law and order and the police investigation. But this is also undoubtedly intended to make it harder for workers to congregate and discuss their next moves. The provincial government has conspicuously only ruled out a merger with Jianlong. It has not issued any statements that the threat of privatisation is removed or any guarantees for existing jobs and pension entitlements. Workers at Tonghua must continue their struggle and deserve the support of other workers in China and internationally.

In our (Chinese language) reports on the chinaworker.info website we have put forward the following demands for this struggle to reach a successful conclusion:

* Mobilise mass pressure to stop the privatisation of Tonghua Steel immediately; build factory committees, democratically elected worker representative should take over control and management of the factory.
* Tonghua workers should organise an independent trade union, for collective negotiation with the local government to achieve real workers’ democratic control of the workplace, and drive out any private company’s managers and bureaucrats.
* Release all arrested workers and worker representatives, against any repression and harassment by the regime and police.
* Elect an independent investigation committee with workers and other third party representation to look into these events, including the process of privatisation, repression by police and actions of the state bureaucracy.
* All socialists and the left should unite in support of Tonghua steel workers’ struggle against privatisation, against capitalism and against bureaucratic dictatorship. Linking the Tonghua steel workers’ struggle with the Baoding garment workers’ struggle, to put the case for a socialist labour movement in China.
* Finally, chinaworker.info believes the only way to end the current crisis is to eliminate capitalism and bureaucratic dictatorship, through democratic organisation of the working class and masses from below to plan the economy under public ownership, and to achieve real democratic socialism.

China Labor Watch: Labor Violations, Bogus Standards in Wal-Mart’s Chinese Supply Chain

NEW YORK, July 27 /PRNewswire-USNewswire/ — Facing consumer scrutiny, Walmart has established corporate responsibility standards, enforced through factory audits. Yet despite rising production costs, Walmart has not increased prices it pays for goods. As a result, factories exploit and cheat on environmental commitments. During Walmart inspections, records are hidden and workers are forced to lie about conditions. Like Wal-Mart’s standards, these inspections are a PR performance.

China Labor Watch has published a report on its long-term investigation of Wal-Mart’s Chinese supply chain. The report is based on CLW’s investigations from April to June 2009 of Walmart suppliers Huasheng Packaging Factory and Hantai Shoe Factory.
Violations at Huasheng include:
1. Elaborate system to cheat Walmart audits.
2. Some workers make only $0.51/hour, 60% of the minimum wage.
3. Poor working conditions: workers inhale large amounts of paper particles and other debris.
4. Twelve workers live together in cramped dorms.
5. Workers not paid overtime wages.
6. During busy season, workday is 11 hours or 77 hours per week, and overtime is mandatory.
CLW first investigated Hantai Shoe Factory in July 2008. Although Walmart pledged that it would address violations, no public update materialized. CLW’s follow-up reveals new violations, and old problems have also persisted. Violations include:
1. Overtime only paid up to Wal-Mart’s limits. When overtime surpasses the limit, extra wages are not paid until the following month.
2. Workers forced to lie to Walmart inspectors.
3. 5 hours overtime daily. If workers request not to work overtime once, they will be denied any overtime for a month.
4. Disguised layoffs to avoid paying severance payments to workers. Workers are abused by management or switched to undesirable jobs until they quit voluntarily.
As the world’s largest retailer, Walmart has the responsibility and ability to implement basic standards. CLW Executive Director, Li Qiang, stated, "Wal-Mart’s Social Responsibility standards are merely a public relations gimmick and have not actually been implemented; they are a cost-free way to improve public perceptions of Wal-Mart."
Although Chinese workers lack recourse against abuses suffered in Wal-Mart’s supply chain, the world can condemn Wal-Mart’s unethical behavior.
The China-U.S. Economic and Strategic Dialogue, which opened in Washington today, will focus on economic, environmental and security cooperation. CLW calls on senior officials of both governments to encourage multinational companies to improve labor conditions and promote effective implementation of China’s Labor Contract Law.
As labour disputes rise 30 per cent in first half of 2009, courts emphasize stability
The Supreme People’s Court (SPC) announced on 13 July 2009 that labour disputes in China as a whole climbed by 30 percent in the first half of 2009. Certain areas saw sharper increases, with labour disputes in the first quarter of 2009 shooting up by 41.6 percent in Guangdong, 50.3 percent in Jiangsu, and a staggering 159.6 percent in Zhejiang.
A SPC spokesperson told Caijing magazine that the international financial crisis was the main reason for the increase in disputes, but Caijing also noted that the passing of two important laws in 2008 – the Labour Contract Law and the Labour Dispute Mediation and Arbitration Law – had helped give workers additional means with which to defend themselves.
Caijing reported that certain new trends were evident in the cases of the first half of 2009. In the past, most cases involved the relatively simple issues of wages in arrears and other economic compensation issues; now cases often involved non-payment of insurance, retirement procedures, open-ended contracts, and equal pay and benefits for similar work status, and other more complicated issues.
The relatively low threshold for bringing a case to the labour dispute arbitration committee, often only 10 yuan, was cited as another reason for the increase.
To help manage with the sudden surge of labour disputes, the Supreme People’s Court issued a Guiding Opinion for handling labour arbitration and the courts to follow. Although the Opinion reiterates many long-standing themes, its overall point of emphasis is to balance the legal rights and interests of workers while at the same time allowing enterprises to survive the current difficult economic climate. Of particular interest are points 8, 9, and 11.
Point 8 says that cases arising from basic wages in arrears and overtime payments should be appropriately handled. But stresses that courts should operate under the principle of “quickly register the case, quickly mediate, quickly try the case, and quickly implement the verdict. This emphasis on speed could be aimed at preventing desperate workers from taking to the streets in protest.
In Point 9, courts are encouraged to mediate between parties involved in lay offs, and encourage enterprises not to lay off employees. If enterprises are unable to pay off laid-off employees in a lump sum, then the court should urge the employer to mediate a settlement that would include economic compensation in installments or other such methods. This measure could be interpreted as a way to help struggling businesses and shore up social stability.
Point 11, regarding the rational adoption of property preservation measures, states that courts should fully consider the survival and development of enterprises while at the same time guaranteeing workers’ livelihoods and social stability. For enterprises with cash flow problems, and for responsible firms that have operational development potential, courts should allow troubled enterprise to use their “detained” or “sealed” assets for business purposes, while under the watch of the government. Enterprises would not be allowed to sell off or transfer their assets. Courts should only freeze or transfer assets with caution, and the court should not auction off factory equipment.
Overall, the Guiding Opinion’s main goal is to actively serve the Party and government leaders in the promotion of the “harmonious stability.” A court representative told Xinhua: “the people’s court in the work of trying civil cases, must be carried out from beginning to end by focusing on serving the overall work of the Party and the country” . This emphasis is entirely consistent with the findings by Thomas Kellogg in his article “The Death of Constitutional Litigation in China?” in which he states that the court, under the leadership of SPC President Wang Shengjun, has often emphasized the "three supremes" – “Party interests, public opinion, and legal rules”. Furthermore, under Wang’s conception of the court’s role, judicial work should serve to “promote social harmony”, and indeed, the court’s recent actions seem to follow in that vein.
Since China’s macro-economic climate has seen a remarkable comeback with the announcement of GDP growth of 7.9 percent in the second quarter of 2009, it will be interesting to observe how the courts will take into consideration the relative strengths of each parties interests once the long shadow of the economic crisis recedes.
Production continues as police investigate steel factory brawl in NE China

www.chinaview.cn 2009-07-28 12:52:06

CHANGCHUN, July 28 (Xinhua) — On Tuesday, a spokesman of the Jilin Province iron where about 1,000 workers erupted in a protest that killed one on Friday denied reports that the protest actually involved 30,000 protesters.
Zhang Zhidong, spokesman of the Tonghua Iron and Steel Share-Holding Co., said production temporarily halted by a worker protest sparked by merger fears resumed Saturday, while police are still investigating the death of the manager killed during the protest.
Zhang has said that the protest could not have involved 30,000 people, as reported by Reuters on July 26 and AFP on July 27.
"The share-holding company is the core production subsidiary of the Tonghua Iron and Steel Group. We only have 13,000 on the pay-roll," he said.
A work group organized by the provincial government to investigate the incident said the manager, Chen Guojun, was dispatched by the Beijing-based Jianlong Heavy Machinery Group to conduct a merger discussion to take a controlling share in the Tonghua Iron and Steel Group.
Wang Xidong, deputy head of the Jilin Provincial State-owned Asset Commission, said changes in share ownership discussed in the merger plan would only directly affect managerial personnel changes, rather than rumored payroll cuts that stirred workers into protest.
According to police, around 1,000 protesters gathered in the company’s office building on Thursday morning. The protest turned violent as they rushed to stop the production line, injuring Chen.
An injured Chen retreated to a worker’s dormitory, but was discovered by a small group of protesters who beat him repeatedly while others threw bricks toward arbitrators and police to thwart rescue.
Chen died in hospital at the 11 p.m. Thursday.
Jianlong has become Tonghua’s second largest share-holder since 2005.
"The provincial government has agreed to terminate the merger discussions after the protest, and the company’s production has been resumed," said the spokesman Zhang.
Workers with the company said they feared that Jianlong, a private company, would soon introduce a downsizing after it takes control of the company.
"Jianlong stopped the merger discussions at the beginning of this year, when our company suffered losses amid the financial crisis. It resumed the talks, as the company’s business recovered. Why should we let such a private firm to take control of us," said a retired worker Zhang Guanghui.
Another worker, Sun Dejun, said worker salaries have not increased in the past three years since Jianlong took shares in the company.
"Jianlong has always called for payroll cuts to prove efficiency. Workers have been kept worrying about their job security," he said.
"I retired at the age of 39 from the company this year. I now live on my retirement pension of 1,000 a month, which is in sharp contrast to the yearly pay of 100,000 yuan a year for mid-level managers in the company," said a worker who declined to give his name. He said he began to petition against the merger in March.
Wang, the state-owned asset commission official, said the Tonghua group company is the largest state asset in Jilin, had accumulated a deficit of 900 million yuan in the first three months of this year as the iron and steel business became one of the country’s hardest hit industries amid the sweeping global financial crisis.
However, the company with annual production ability of 7 million tons saw business recovery in June, when it reported 40 million yuan in profits. The profits doubled to 80 million yuan in July.
"The merger had been approved by the provincial government, which is expected to help Tonghua reach the development goal of reaching 10 million tons in annual throughput," he said.
However, workers from state-owned firms, especially retired workers had believe that state-owned firms are "iron rice bowls" that can guarantee lifelong employment and secure pay, even after retirement. They opposed the merger, which would allow a private firm to disillusion their dream, said Wang.

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